Your Survival Guy

Preparing your investments and family for when disaster strikes.

Disclosure

  • Home
  • Your Survival
    • EMP Threat
    • Tucker Explains
    • Newport Gas Outage
    • Water
      • Emergency Water Storage
      • Let There Be Water
    • Get Your Gun and Your Training Now
    • Satellite Phones
    • Navy SEAL Survival Kit
  • Your Money
    • Coronavirus Infects Stock Market
    • Looking for a Better America
    • You Invest, They Win
    • Where to Keep Your Cash
    • Paris
    • How to Buy a Boat
    • Dead or Alive? The Future of Long-Term Investing
    • Is Vanguard too Big?
    • Cryptocosm and Life After Google
    • The Last Intelligence Report
    • The Truth Behind the S&P 500
    • RAGE Gauge
    • How Many “Retirees” Will Keep Working?
    • Your Retirement Life
    • You’ll Love This if You’re Dreaming of an Active Retirement Life
  • Weapons
    • Self Defense
    • Every Family Should Own at Least One Shotgun: Here Are Three
  • About Me
    • Preparing for Times Like These
    • My Videos/Pics
    • Music
      • RIP Neil Peart: You Will Always Be Remembered as a “Modern-Day Warrior”
  • You
    • Our Cabin on Kodiak, Alaska
    • If You Are in Pain, this May Help. It Helped Me.
    • How to Save for a Grandchild
    • FIRE! Financial Independence, Retire Early
    • Compound Interest
    • Arithmetic of Portfolio Losses
    • Maximum Portfolio Withdrawal Rate
    • An Efficient Frontier
    • Retirement Compounders
    • Counterbalanced Total Returns
  • Survive & Thrive
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • Welcome

SEC Cracks the Floodgates to New Hedge Fund Investors

August 27, 2020 By E.J. Smith - Your Survival Guy

By Gary Saxe @ Shutterstock.com

You may already be an “accredited investor,” with more than $1 million in net assets (excluding your home) or $200,000 in annual income. If so, you’ve long had the ability to invest in hedge funds, where you get the privilege of paying the managers 20% of your profits and 2% of your assets.

But now, the SEC is allowing many more Americans to play at the hedge fund casino. Paul Kiernan reports in The Wall Street Journal:

The Securities and Exchange Commission deemed more investors capable of navigating the opaque world of leveraged buyouts, hedge funds and startups, a decision likely to fuel further growth in loosely regulated private markets.

Commissioners voted 3-2 on Wednesday to approve a proposal expanding its definition of so-called accredited investors to include holders of an entry-level stockbroker’s license, “knowledgeable employees” of nonpublic firms and others. It also opened the door to further broadening the category to holders of other credentials.

Until now, investors could be considered accredited if they had $1 million in net assets, not counting their primary residence, or at least $200,000 in annual income.

The thresholds aren’t indexed for inflation, so the ranks of people who meet them will likely continue to grow.

The SEC didn’t provide an estimate of the number of people who would qualify under the new rule, but its decision to designate certain credentials as a measure of financial literacy is likely to prompt other groups—from chartered financial analysts to holders of law degrees and MBAs—to seek accredited-investor status.

“Now that they’ve opened this door, there’s going to be a lot of trucks trying to drive through,” said Tyler Gellasch, executive director of Healthy Markets, an investor group focused on market structure. “It’s really hard for them to credibly distinguish one qualification from another.”

There’s nothing wrong with Americans having more freedom to do what they want with their money. But with hedge funds, often you invest, and they win.

Not all hedge funds are winners. In fact, hedge funds can be a cyclical asset. Just back in 2017, investors were evacuating big hedge funds in a panic.

And what if you want to invest in a “premier” hedge fund? It will cost you even more than the traditional 2-and-20. Even when you’re paying that extra money, they can blow the big calls.

Action Line: Protect your investments by focusing on dividends, compound interest, and most important, by being patient. Avoid risk where possible.

The following two tabs change content below.
  • Bio
  • Latest Posts
My Twitter profileMy Facebook profileMy Instagram profile

E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com
My Twitter profileMy Facebook profileMy Instagram profile

Latest posts by E.J. Smith - Your Survival Guy (see all)

  • Happy Martin Luther King Jr. Day! - January 18, 2021
  • Are $2,000 Checks Going to Rebuild NYC? - January 15, 2021
  • The Fed is Sacrificing Retirees to Save the Banks - January 15, 2021
  • How Are You Doing on a Local Level? - January 14, 2021
  • February RAGE Gauge: Americans Focusing on What’s In Front of Them - January 14, 2021

If you enjoyed this post, email it to a friend:

  • Email
  • Print
  • Facebook
  • LinkedIn
  • Twitter
  • WhatsApp

Related Posts

Trending

  • H2O, Skiing, Hiding A$$ET$, Bitcoin, Ammo & More
  • There's Always a Way Forward for Americans Like YOU
  • What Living in Two Americas Looks Like Today
  • America 2022: Time to Take Back What's Ours
  • Why Buying Bonds Matters in Times Like These
  • Great Reset, Swiss Way, and Living YOUR WAY
  • Be Prepared for Another Great Lockdown, Recession, or Reset
  • How Are You Doing on a Local Level?
  • Stocks: Are You Sticking Your Neck Out Too Far?
  • February RAGE Gauge: Americans Focusing on What's In Front of Them

YOUR SURVIVAL GUY MUST READS

  • RIP Eddie Van Halen
  • “I Never Saw My Kids,” He Said. “Now, I See Them All the Time”
  • Exclusive! Survive and Thrive: Election 2020 Edition: Stock Market is Predicting a Trump Win
  • The Case for Individual Stocks: Now More than Ever
  • Survive and Thrive December: Disaster Prep in Our Newport Bunker and Your Survival
  • New Yorkers Flee to Suburban Islands in Droves
  • When Isn’t Money Tight? Read More to Find Out
  • Navy SEAL Hell Week: “You Come SEE ME FIRST and We’ll ALL Get Through This TOGETHER”
  • Why Vanguard is too Big: Part V: How You’re Being Forgotten
  • Once Desolate Country Towns Now Overrun by People Trying to Escape the City
Only if You’re Serious
Only if You’re Serious
Only if You’re Serious
Escape the City
Only if You’re Serious
Why Vanguard is Too Big for YOU
See Who's Missing the Boat
You Invest, They Win
Emergency Water Storage
Emergency Water Storage
Emergency Water Storage
Why Fidelity is Number One

Copyright © 2021 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.